The Office of the Comptroller of Currency (OCC) has expressed strong opposition to a new Illinois law concerning credit and debit card transactions. The OCC filed an amicus brief last week, criticizing the Illinois Interchange Fee Prohibition Act as "bad policy and an unlawful interference with federally granted powers." This legislation is scheduled to take effect on July 1, 2025.

Richard Hunt, Executive Chairman of the Electronic Payments Coalition, echoed the OCC's concerns by stating that the law is "'ill-conceived, highly unusual and largely unworkable' and would lead to 'higher fees, reduced services, and weakened fraud protection.'"

Federal officials argue that credit and debit card transactions are crucial for the economy. They assert that fees collected by financial institutions are "fundamental to safe and sound banking." The Biden administration has requested a federal judge to block this pioneering state law from being implemented next summer.

According to Bloomberg, a key federal regulator believes that banning swipe fees on taxes and tips could potentially "erode" payment infrastructure. Payments Dive reports that the OCC described this Illinois legislation as prohibiting interchange fees on tips and excise taxes.

Law360 highlights that the OCC warned this measure threatens funding and consumer confidence in the banking system.